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Crowdsourcing: A Definition

I like to use two definitions for crowdsourcing:

The White Paper Version: Crowdsourcing is the act of taking a job traditionally performed by a designated agent (usually an employee) and outsourcing it to an undefined, generally large group of people in the form of an open call.

The Soundbyte Version: The application of Open Source principles to fields outside of software.

The Rise of Crowdsourcing

Read the original article about crowdsourcing, published in the June, 2006 issue of Wired Magazine.

August 19, 2008

And the Rheingold Goes to .... Dell

When I do media interviews or public talks, I'm almost invariably asked two questions: 1) Are there any big companies engaged in crowdsourcing? and 2) Who is using crowdsourcing effectively? One would think I could provide one example that would answer both questions, but that's suprisingly difficult to do. As I say in my book: "We know crowdsourcing exists because we've observed it in the wild. However, it's proven difficult to breed in captivity." (Ewww. Did I just quote myself?) What I mean by this is that the mostsuccessful applications of crowdsourcing occurred organically as a function of astute people wanting to serve communities with which they were already intimately familiar. By contrast, companies that have set out to apply crowdsourcing consciously have a tougher row to hoe.

Howard Rheingold, namesake of The Rheingold Award

That's why I want to award the first Rheingold Award to Dell, Inc., for its IdeaStorm initiative. As I note in the book, IdeaStorm is essentially just an updated suggestion box. But oh, the difference the updates make. Dell launched IdeaStorm in February 2007 with the fairly modest goal of enabling "you, the customer, to tell Dell what new products or services you’d like to see Dell develop." This is the point when most wizened media observers roll their eyes. For the last several years we've grown accustomed to watching Fortune 500 companies pay lip service to social media without actually adhering to the principles that make the groundswell so powerful. To be honest, I thought IdeaStorm was just another example of this unfortunate, predictable trend. I couldn't have been more wrong.

It wasn't long before Dell was dealing with more than it'd bargained for. Within ten days Linux fanboys swamped the site, demanding a Dell pre-loaded with the open source operating system. At first Dell stumbled, moving to censor the, er, robust conversation that ensued. But then Dell showed it was serious about creating a partnership with its customers, announcing it would bow to the crowd and release a PC pre-loaded with the Ubuntu version of Linux. Go crowd. Go Dell.

Since then, Dell has quietly but persistently managed the site, taking pains to communicate with its community members and install changes to the site according to suggestions from users. Crowdsourcing generally requires a vibrant community, and such a resource can not be built overnight, and it can't be bought. It can, however, be built through a lot of painstaking effort and humility, which is just what Dell has displayed on IdeaStorm.

The fruits of the IdeaStorm partnership culminated on August 12, when Dell rolled out nine new laptops, all of which incorporated design elements proposed, promoted and debated by the IdeaStorm community. Instead of using IdeaStorm to put lipstick on a pig, Dell patiently cultivated debate and then implemented the best (and most popular) ideas into real world products. In other words, they listened instead of talking, and then they acted. Crowdsourcing doesn't always conform to the need for quarterly results, but it can handily reward patience and long-term thinking.

But don't take my word for it. Ann All at The Visible Enterprise wrote a fine summary of her interview with IdeaStorm's community manager, Vida Killian. She also wrote a study for Deloitte-Touche that contrasted Dell with other corporate attempts at online communities that have faltered. Here was one of my favorite insights: "Financial benefits are harder to pinpoint, a fact that may lead some companies to pass on the idea," writes All. "Says Killian:

It’s not your traditional ROI model. Back to the
culture, it supports the fact that you don’t need a hard number at the
end of the day. It’s the right thing to do, we want to listen to our
customers, so let’s do it."

Here here. Congratulations Dell on winning the very first Rheingold (and truth be told, inspiring its creation). Now I just have to figure out what a Rheingold should look like.

Comments

Also, thanks for the links - having worked with similar initiatives in Nokia (note to other readers: I'm heading www.nokia.com/betalabs), the issues discussed in the interview sounded very familiar.

There is one thing I'm currently struggling with, however. That is, does community voting really bring effective results in this kind of context? After all, the community couldn't care less at all about the business side: costs + money-making potential. As case example, wasn't Dell's (IdeaStorm influenced?) decision to sell Linux PCs at Wal-Mart a commercial disaster? Or, an example closer to home, is "Russian language support" really the most pressing improvement need Nokia's gaming platfrom N-Gage? http://ngage.uservoice.com

I wonder, how should we implement the voting thing to produce truly valuable suggestions? And by valuable, I mean something that makes sense both for the company involved and for its customer base.

Ps. if somebody from Dell is listening, I'd be happy to talk with you directly some day - I'm sure we could learn from each other :)

First of all, I'm very happy to accept this award on behalf of Dell! Thank you Jeff for the kind words and very creative award. I personally think a Rheingold should somehow mimic Howard's hat in his picture.

Tommi - I'd be happy to connect with you as well. I do believe in the power of voting. However, it is not the only thing we look at when evaluating ideas. We have implemented many low vote ideas because they were the right thing to do for the business. And we have Reviewed, but decided not to Implement, many of the very high rated items because it was not part of business model. However, as was the case for Linux for us, if you have enough people asking for Russian language support, then it is probably worth looking into even if it would have never made your radar screen otherwise.

The sweet spot of great idea that is great for the customer and great for the company as well does happen - just not on every idea.

Hi Jeff
Great Post...and i agree with Tommi that it is an excellent choice.I was pretty suprised myself as to how actively the IdeaStorm community had participated in discussions around the choice of operating system to the design and even the recent use of plastics in the packaging.
Shows off the power of the crowd
Anyways good luck and waiting for the next Rheingold Award..Love the hat though.

Thanks guys. Knowing that I can help bring like minds together from other sides of the globe gives me immense satisfaction.
@David and Vida--I'm with you guys. I think the Rheingold must incorporate the hat!

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I think this great news to know that dell is the one started ideal storm and every one eyed on them when they took initiative of this idea. I think this is the best way to ask your customers about their choices regarding different products. Thanks for sharing this information!